BTC ETF: the ETF trading data doesn't look good in the short term so be careful and DFTU folks. Stay away form leverage is the way to go.

Sometime, the best way to win is to make sure that you'll stay away and survive from key events.

The more we look at the factual ETF trading data (until day 6 or last Friday) and insight information shared by highly credible and experience folks like Eric Balchunas (Bloomberg Senior ETF Analyst, one of the best crypto EFT guys) or JA Maartunn (CryptoQuant Comm Manager, the "crypto market watcher guy"), the worse the current situation seems to be.

What we are all probably be aware of the current situation is:

• (1) Grayscale is selling BTC via Coinbase's OTC. And they are selling damn hard every single day last week.
• (2) People are buying the newly approved BTC ETFs at a remarkable rate.

The BTC ETF money flow can be seen in this tweet of Eric Balchunas (and I also copy/paste the figure here for your quick reference).

What we previously assumed is:

• A lot of folks are simply exiting their Grayscale's GBTC position and swich to the other ETFs to save fees/costs. Hence this is kind of a simple swap and will not have any impacts on the market overall.

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HOWEVER, IT SEEMS THAT THIS ASSUMPTION IS NOT TRUE.

IT SEEMS THAT A LOT OF THE OUTFLOW FROM GRAYSCALE'S GBTC JUST SIMPLY LEFT THE MARKET.

And majority of the inflow of other ETFs (Blackrock, Fidelity, etc.) are purely new people joining the market.

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Why this is important and what is the potential impacts?

This is critical because it means that:

• There are still a lot to sell from Grayscale's end. And it's hard to know when they will end this. More importantly, this huge amount of outflow is actually leaving the market for good.
• The buying power from the other ETFs is mainly from new investors hence will likely cool down very soon. They already reached a historic inflow record for a new ETF. And it's just hard to believe that they have a lot of ammunitions left in their tank when both dXY and interest rate is still at the significantly high value (i.e. people are likely to keep their cash in the short term).
• There might be a significant amount of long positions below 40k BTC. And if that support level is broken, expect a cascading liquidation effect. That support level, unfortunately is pretty close now (we are at ~41.6k at the time of this writing).

So what do all of these things mean?

• You should be highly cautious and stay away from leverage (especially long)
• You should watch the in/out flows of these ETFs. If you see a significant downturn of folks in "The Nine" group ad Eric called it, there's a great chance that BTC will enter a downward spiral and only Satoshi knows where this bloodbath will end (we think it'll be around the rank 30k-35k if this happens).

Eat well and stay away from leverage and you'll probably be fine.

All the best.

Latest BTC ETF flows (from Eric Balchunas)